$3.5bn Falcon Oils refinery clears key CPEC approval hurdle

Falcon Oils’ proposed $3.5 billion refinery and storage complex in Dhabeji, Thatta, has cleared a key institutional stage after the China-Pakistan Economic Corridor (CPEC) Secretariat endorsed the project and requested the Board of Investment (BoI) to present it to the Joint Working Group on Industrial Cooperation.

 

The development is being positioned as one of Pakistan’s major privately funded industrial investments and could strengthen private-sector participation in the country’s petroleum and energy infrastructure.

 

According to an Office Memorandum issued by the CPEC Secretariat on August 24, Falcon Oils (Pvt) Limited has proposed establishing a 100,000-barrel-per-day deep-conversion refinery at Dhabeji, along with a large-scale petroleum storage facility and captive power generation unit.

 

The project is proposed for inclusion in the CPEC framework as a business-to-business initiative, supporting the second phase of CPEC and the governments’ focus on expanding private-sector cooperation.

 

The planned complex will have crude and petroleum-product storage capacity of around 4 million tonnes and include a 50MW captive power plant. The refinery is expected to produce Euro-V compliant petroleum products, potentially increasing domestic refining capacity and reducing dependence on imported finished fuels.

 

The project has also established partnerships with Chinese engineering companies. The feasibility study has reportedly been prepared by Xinjiang Petroleum Engineering Design Co Ltd, while engineering, procurement and construction arrangements have been signed with CEEC-GEDI/CGGC.

 

Dhabeji’s location in Sindh’s coastal industrial zone provides strategic access to Karachi’s port infrastructure and crude-import facilities, making it suitable for a refinery designed to process imported crude and supply petroleum products to the domestic market.

 

The proposed facility could also contribute to Pakistan’s energy security by expanding deep-conversion refining capacity and enabling a greater portion of petroleum imports to shift from finished products towards crude oil. The additional storage infrastructure could further strengthen the country’s ability to manage petroleum supplies.

 

Falcon Oils has stated that the project will be developed and financed entirely by private sponsors on a fully non-recourse basis. The company says the investment will not involve sovereign guarantees or financial recourse to the Government of Pakistan.

 

The project is expected to generate substantial employment during construction and create permanent jobs after commissioning, potentially establishing a major industrial base in the Dhabeji-Thatta region.

 

Falcon Oils CEO Sirhaan Ahmed Khan described the CPEC Secretariat’s endorsement as a significant milestone for the project and said it would help advance the refinery through the formal CPEC industrial cooperation process.

 

The next stage will involve the Board of Investment taking the proposal before the Joint Working Group on Industrial Cooperation, where its future progression within the CPEC framework will be considered.

 

If implemented, the 100,000-barrel-per-day refinery would represent a significant addition to Pakistan’s refining and petroleum-storage infrastructure and could become an important example of privately financed investment under the next phase of Pakistan-China economic cooperation.